The company where Edward works produces skateboards locally but sells them globally for $60 each. Edward is one of the production managers in a meeting to discuss preliminary results from the year just ended. Here is the information they had in front of them: Standard Quantity per unit: wood 2.00 feet wheels 4.00 wheels direct labor 30 hours Standard Price: wood $5.00 per foot wheels $.55 per wheel Direct labor $16.00 per hour Actual results: - Quantity of wood purchased, 180,400 feet; quantity of wood used, 176,400 feet. - Quantity of wheels purchased, 361,680 wheels; quantity of wheels used, 337,680 wheels. Actual cost of the wood, $5.10 per foot. - Actual cost of the wheels, $0.60 per wheel. - Quantity of DL hours used, 26,880 hours; actual cost of DL hours, $17.50 per hour. - Actual units produced, 84,000 skateboards. Your answer is correct. Complete a variance analysis for DM (both wood and wheels) and DL, determining the price and efficiency variances for each; be sure to specify the amount and sign of each variance. Create a T-account for each DM Inventory account and for WIP Inventory, assuming all started with zero balances. Given your variance analysis in part (a), record any new debits and/or credits to these two T- accounts to reflect the DM and DL activity. Then, explain the ending balances for each DM Inventory account - what does each consist of in terms of DM quantity and price? (Round cost per unit to 2 decimal places, e. g. 15.25.) The ending balance in DM Inventory-Wood consists of /foot. feet at cost of \$ The ending balance in DM Inventory - Wheels consists of wheels at cost of $wheel.
The company where Edward works produces skateboards locally but sells them globally for $60 each. Edward is one of the production managers in a meeting to discuss preliminary results from the year just ended. Here is the information they had in front of them: Standard Quantity per unit: wood 2.00 feet wheels 4.00 wheels direct labor 30 hours Standard Price: wood $5.00 per foot wheels $.55 per wheel Direct labor $16.00 per hour Actual results: - Quantity of wood purchased, 180,400 feet; quantity of wood used, 176,400 feet. - Quantity of wheels purchased, 361,680 wheels; quantity of wheels used, 337,680 wheels. Actual cost of the wood, $5.10 per foot. - Actual cost of the wheels, $0.60 per wheel. - Quantity of DL hours used, 26,880 hours; actual cost of DL hours, $17.50 per hour. - Actual units produced, 84,000 skateboards. Your answer is correct. Complete a variance analysis for DM (both wood and wheels) and DL, determining the price and efficiency variances for each; be sure to specify the amount and sign of each variance. Create a T-account for each DM Inventory account and for WIP Inventory, assuming all started with zero balances. Given your variance analysis in part (a), record any new debits and/or credits to these two T- accounts to reflect the DM and DL activity. Then, explain the ending balances for each DM Inventory account - what does each consist of in terms of DM quantity and price? (Round cost per unit to 2 decimal places, e. g. 15.25.) The ending balance in DM Inventory-Wood consists of /foot. feet at cost of \$ The ending balance in DM Inventory - Wheels consists of wheels at cost of $wheel.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The company where Edward works produces skateboards locally but sells them globally for $60 each.
Edward is one of the production managers in a meeting to discuss preliminary results from the year just
ended. Here is the information they had in front of them: Standard Quantity per unit: wood 2.00 feet
wheels 4.00 wheels direct labor 30 hours Standard Price: wood $5.00 per foot wheels $.55 per wheel
Direct labor $16.00 per hour
Actual results: - Quantity of wood purchased, 180,400 feet; quantity of wood used, 176,400 feet. -
Quantity of wheels purchased, 361,680 wheels; quantity of wheels used, 337,680 wheels. Actual cost of
the wood, $5.10 per foot. - Actual cost of the wheels, $0.60 per wheel. - Quantity of DL hours used,
26,880 hours; actual cost of DL hours, $17.50 per hour. - Actual units produced, 84,000 skateboards. Your
answer is correct.
Complete a variance analysis for DM (both wood and wheels) and DL, determining the price and
efficiency variances for each; be sure to specify the amount and sign of each variance.
Create a T-account for each DM Inventory account and for WIP Inventory, assuming all started with zero
balances. Given your variance analysis in part (a), record any new debits and/or credits to these two T-
accounts to reflect the DM and DL activity. Then, explain the ending balances for each DM Inventory
account - what does each consist of in terms of DM quantity and price? (Round cost per unit to 2 decimal
places, e. g. 15.25.) The ending balance in DM Inventory-Wood consists of /foot. feet at cost of \$ The
ending balance in DM Inventory - Wheels consists of wheels at cost of $wheel.
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